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Research Problem 3. Rick Beam has been an independent sales representative for various textile manufacturers for many years. His products consist of soft goods, such

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Research Problem 3. Rick Beam has been an independent sales representative for various textile manufacturers for many years. His products consist of soft goods, such as tablecloths, curtains, and drapes. Rick's customers are clothing store chains, department stores, and smaller specialty stores. The employees of these companies who are responsible for purchasing merchandise are known as buyers. These com- panies generally prohibit their buyers from accepting gifts from manufacturers' sales representatives. IS Each year, Rick gives cash gifts (never more than $25) to most of the buyers who are his customers. Generally, he cashes a large check in November and gives the money personally to the buyers around Christmas. Rick says, "This is one of the ways I maintain my relationship with my buyers." He maintains adequate substantiation of all of the gifts. Rick's deductions for these gifts have been disallowed by the IRS based on $ 162(c)(2). Rick is confused and comes to you, a CPA, for advice. Write a letter to Rick concerning his tax position on this issue. Rick's address is 948 Octavia Street, Baton Rouge, LA 70821. b. Prepare a memo for your files supporting the advice you have given. a. Use internet tax resources to address the following questions. Look for reliable web- sites and blogs of the IRS and other government agencies, media outlets, businesses, tax professionals, academics, think tanks, and political outlets. FACTS: 1. Provide a heading to clearly identify and set off the facts. 2. State the relevant facts. 3. Do not include facts that have no impact on the relevant law. ISSUE: 1. Identify the tax issues related to the transaction. 2. Write the issues in question form. DISCUSSION 1. Analysis of tax law supporting conclusion(s) reached 2. Source of tax law (Rules) a. Internal Revenue Code b. Regulations C. Rulings d. Court Decisions 3. Application a. Discuss tax authority in sufficient detail to show its relationship to the client's situation. b. Connect logically the rules to your specific fact pattern. C. Pull in actual words from your summary of the facts, and describe how they relate to actual words from the rules. CONCLUSION 1. For each issue, give a clear and unambiguous conclusion. 2. In this section, briefly summarize key points from our analysis that were considered in arriving at the conclusion reached. 3. Once you reach the point of documenting your conclusion, it may already be fairly obvious from your analysis which treatment is most appropriate. In such cases, your conclusion can be fairly brief

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